Telstra has posted a 15.6 per cent fall in annual profit and extended a pause on planned job cuts after a challenging year marked by the coronavirus pandemic and the summer bushfire crisis.
The telecommunications giant’s net profit for 2019/20 was $1.82 billion, down from $2.15 billion in the previous year, on revenue of $23.7 billion, which was in line with expectations.
Like-for-like underlying earnings totalled $8.4 billion, down 0.3 per cent.
“The emotional, mental and economic stresses as a result of the COVID-19 pandemic and necessary restrictions have been profound,” chief executive Andrew Penn said on Thursday.
“Through this extraordinary disruption – both the COVID-19 and bushfire crises – Telstra was challenged to adapt, to find new ways of supporting our customers, our people and the country in a time of need.”
But Telstra is looking to the 2020/21 year with “confidence” and has forecast underlying earnings of between $6.5 billion and $7 billion, assuming a negative impact from the pandemic of about $400 million.
“It is clear that COVID-19 will remain with us for some time. However, we will adapt to deal with the challenges this will bring,” Mr Penn said.
Telstra cut underlying fixed costs by down $615 million over the year, leaving it on track to meet its goal of $2.5 billion in cuts in fiscal 2022.
Overall, mobile revenue declined $461 million in 2019/20 while fixed-line revenue continued to be affected by NBN migration, alongside a continued decline in voice services.
“NBN wholesale pricing remains the largest negative impact on our fixed business,” Mr Penn said.
“Without some sort of long-term change … the risk of retail price increases, reduced customer experience or customers moving onto other networks such as 5G will increase.”
In March, Telstra paused its ongoing plan to cut jobs for six months.
It’s now extended that time frame to February next year to “give some certainty to our people in what is a very challenging time”.